Farmed Atlantic salmon is Scotland’s leading food export with sales in 68 markets. However, the country’s exporters are now taking a much more targeted approach to its end-markets with strong emphasis on the United States and Far East.
Scott Landsburgh, CEO of the Scottish Salmon Producers’ Organisation, spoke with SeafoodSource about this targeted approach, along with the state of Scottish salmon production and some of the challenges it is facing, including the Russian trade ban.
Q: In volume terms, how much farmed Atlantic salmon was produced in Scotland in 2014 and what is the forecasted output for this year?
SL: Production for 2014 was forecast at 165,000 metric tons (MT). This year, we are expecting steady growth and it is estimated that Scotland will produce a further 15,000 MT of salmon.
Q: What is the current value of Scottish salmon production and what level could it potentially reach in the next five years?
SL: Salmon farming already generates GBP 800 million (EUR 1.1 billion; USD 1.2 billion) for the country’s economy and in doing so provides employment for thousands of people, but its contribution could be considerably greater. According to the recent independent study, “An Assessment of the Benefits to Scotland of Aquaculture,” which was commissioned by Marine Scotland and the Highlands and Islands Enterprise (HIE), if the 2020 Marine Fin Fish production target of 210,000 MT is met, it is likely to achieve a turnover value of GBP 1.1 billion (EUR 1.5 billion, USD 1.7 billion) across the supply chain while supporting more than 7,000 jobs.
Output increases will be achieved if producers obtain development planning and also improve their yields. The Scottish Government has been supportive of the development of the industry and its long-term plan to realize its 2020 production ambition. It is early days and it’s difficult to say for sure because you can’t foretell agreements on planning development by local authorities. The Scottish salmon industry is highly regulated and the planning process is complex and challenging.
Q: Scottish salmon is a very important export for the U.K. economy. What are its main overseas markets and what new markets present the most potential?
SL: Salmon is the U.K.’s top selling seafood product and around 40 percent of Scottish production goes toward fulfilling domestic demand. However, salmon is also Scotland’s leading food export with a value of around GBP 500 million (EUR 678.8 million, USD 767.9 million) last year. 2014 brought another strong period of growth for Scottish salmon producers. Exports grew by 12,000 MT increasing values by GBP 44 million (EUR 59.7 million, USD 67.6 million). At the last count, Scottish salmon was enjoyed in 68 countries.
Following significant growth in the last couple of years, the United States is now Scotland’s single biggest export market. Last year, 41,000 MT of Scottish salmon crossed the Atlantic; that’s an increase of 3,000 MT compared to 2013. Sales grew by GBP 15 million (EUR 20.4 million, USD 23 million) taking the 2014 export sales to almost GBP 215 million (EUR 291.9 million, USD 330.2 million). The U.S. trade is helped by a relatively straightforward access to market. Scotland is a relatively short flight away from New York, which means it takes just two to three days – harvest-to-plate – for Scottish salmon to reach diners on the eastern seaboard.
Far East exports have also continued a rapid growth trend, achieving record total value of GBP 86.5 million (EUR 117.4 million, USD 132.9 million). This trade has been underpinned by the development of the Chinese market, which has grown from virtually nothing in 2010 to be worth around GBP 64 million (EUR 86.9 million, USD 98.3 million) by the end of 2014.
Looking ahead, we expect to see continued growth in both the U.S. and Asian markets.
There isn’t any strategic reason why we are in 68 markets; it’s just something that has built up over many years as a consequence of strong trade relationships. What we are moving toward now, however, is a much more targeted strategic export focus. Looking forward, the U.S. is definitely going to grow, as is China and Hong Kong. Alongside these markets, Scottish companies also want to target Taiwan, Singapore and South Korea.
To help promote the provenance and quality of Scottish salmon in new and emerging Asian markets, the SSPO, along with Seafood Scotland and Scottish Development International (SDI), has implemented a successful Raising Awareness Program. Matched with funding from the European Fisheries Fund (EFF), the inaugural program began in 2012 and completes in 2015. It essentially enables industry representatives to host and attend international events to promote the quality and provenance of Scottish salmon and to meet key buyers and suppliers. There are high hopes that another contract will be agreed upon to run for a further three years.
At the same time, SSPO, Scottish Quality Salmon and Seafood Scotland – again in partnership with SDI and with EFF funding – have a two-year contract with the World Association of Chefs Societies (WACS), which sees Scottish salmon and langoustines featured in the WACS global chef competitions. With more than 10 million members worldwide, WACS is very influential in the restaurant and catering sectors, particularly with regards to what is good for the premium market in terms of raw materials.
Q: Closer to home, how has Scottish salmon performed in European markets in recent years?
SL: Despite the challenging economic circumstances in continental Europe, the value of Scottish exports into the EU has continued to hold up. Traditionally, the biggest EU export market for Scottish salmon is France, and the latest results show that sales grew by 39 percent to GBP 110 million (EUR 149.3 million, USD 169 million) in 2014 in this country alone. The industry remains fiercely proud of the fact that in 1992 Scottish farmed salmon became the first non-French product to obtain the Label Rouge distinction. Recent changes to Scotland’s Label Rouge quality assurance standard have provided the opportunity to enhance sustainability and increase supply. We are hopeful France will come back again quite strongly within the next couple of years.
Meanwhile, the year-long full embargo that was imposed by Russia on food imports from the EU, U.S. and some other Western countries in August 2014 has not significantly affected Scotland’s salmon trade, as Russia’s main salmon imports were from Norway. I believe the markets have sorted themselves out; it was more about displacement rather than an actual run on the market price. Russia still has to import salmon, currently it’s buying it from somewhere else, which has required a period of adjustment from the entire salmon farming industry, but there appears to be no long-term impact on market prices.
Q: In your opinion, what are the main reasons for Scottish salmon’s overseas popularity and success?
SL: Scottish salmon is renowned for its high quality, firm flesh and distinct flavor. It is these eating qualities, in addition to the Scottish provenance and tradition that have facilitated a premiumization of the products. The fast route to market is definitely a driver as is the provenance of Scotland and Scottish waters. The cold, pristine waters of the northwest of Scotland and all its islands very much resonates in both the North American and Far East markets. You are getting beautiful fish from pristine, very carefully chosen from sites that have been selected for their water exchange. All together, this means you’re getting very good fish with very high quality flesh.
